RED LODGE — Red Lodge is navigating the complex relationship between its tourism-dependent economy and the housing challenges that come with a growing vacation rental market.
The small mountain town has become a popular destination for visitors, with vacation rentals playing a significant role in the local economy.
Watch how the Chateau Rouge will be operated by individual owners and the advantages of it:
Mayor Dave Westwood said the city has established a cap on rental properties to manage growth while still supporting tourism.
“Red Lodge is very much a tourism-based economy, and vacation rentals play a significant part of that,” Westwood said Sunday.
A couple of years ago, the Red Lodge City Council passed a cap on vacation rentals at 20% of total housing units. Currently, Red Lodge sits at just 11%, with around 200 vacation rentals operating in the community.
The Chateau Rouge, a popular destination for out-of-town visitors, recently made a significant change to its business model.
As of Oct. 1, the property transitioned from a traditional motel operation to condominiums, which can be rented long term.
“All the units have always been individually owned and decorated by the owners but rented like a motel room,” said Sandy Conlee, a real-estate agent for the Chateau Rouge. “As of Oct. 1, they've done away with that model and gone to straight condominiums. So as a condominium, they can be used as short-term rentals, long-term rentals. You could live here. You could do what you want with your own unit.”
Conlee said the change offers advantages for property owners.
“The advantage is you can do what you want with the unit,” Conlee said. “The value of your condo has gone up because if you can use it long-term, it'll end up being very inexpensive compared to other condominiums in Red Lodge.”
Local businesses recognize the importance of tourism to Red Lodge’s economy. Michael Downey, general manager at Red Lodge Pizza Co., said the town depends on visitors.
“Red Lodge would not be the town that it is without the tourism,” Downey said.
However, the prevalence of vacation rentals creates challenges for people who want to establish permanent residency in the area.
“The housing market here is a difficult one. There's not a whole lot of options out there, and a lot of the people that have come and bought a home here are just renting them out as Airbnbs,” Downey said.
